The percentage of advisors who are optimistic about the financial markets has dropped to two-thirds, but the outlook of clients appears far worse, according to a recent study by Russell Investments.

Russell's quarterly Financial Professional Outlook, which included the opinions of 300 financial advisors from across the United States, shows 66% are optimistic about the markets, down from 72% just three months ago. But they say only 9% of their clients are optimistic, which is a continued decline from previous months that started at 36% in March.

The topic that is dominating and generating more conversations between advisors and clients is the continued volatility of the markets, the survey says. Of the advisors surveyed, 63% say market volatility has been a primary topic of client-initiated conversations over the last three months and 40% say it will be a focus of their conversation with clients for the future.

More than three fourths of the advisors say the continued volatility has increased the number of calls they are making to clients, while 52% are having more client meetings and 49% are getting more calls from clients.

More clients (44% now compared to 32% in September) are bringing up portfolio performance as a topic of conversation than in the past but advisors are bring it up less often (30% now compared to 42% in June.)

"It can be easy for investors to get caught up in the fluctuations of their portfolios, but advisors are in a position to help their clients determine the best course of action and think through the implications of each decision. Advisors must refocus the conversation on what is really important: improving the likelihood of meeting investors' objectives," says Ryan Parker, managing director, national accounts and business development for Russell's U.S. advisor-sold business.

Most advisors say they are making few, if any, changes to their clients' portfolios during this time.

At the same time that views about the market are declining, many advisors are setting their sights on building business (34%) during the next year and 20% want to enhance their focus on their clients.

Parker feels the faith in business growth is more than just trying to attract uncertain people looking for help. "Good advisors know that they have to find ways to proactively grow their businesses, mainly through client and asset acquisition, given the low-return environment that has persisted for more than a decade," Parker says.

"This opportunity is most likely to be realized by advisors who can create and implement a high-quality client service model for each market segment in their practice," he adds. "To be successful, advisors need to carve out as much client-facing time as possible and should look for ways to create efficiencies with other functions that detract from time in front of clients."

-Karen DeMasters